At Primary Residential Mortgage, Inc., we take pride in offering customers a wide selection of loan options so that people can find home financing in many different situations.
One common loan product we offer is an FHA loan. If you’d like to learn more about this popular home financing option, check out these frequently asked questions.
What does FHA stand for?
FHA stands for Federal Housing Administration. It’s the government agency that insures mortgage loans.
What is an FHA loan?
An FHA loan is a government-insured mortgage that is designed to make buying a home more affordable. FHA loans have more lenient down payment and credit requirements than traditional loans.
What down payment is required with an FHA loan?
The down payment requirement for an FHA loan is generally smaller than for a traditional loan. It can range from 3.5% to 10% depending on your credit score.
Do you need great credit to qualify for an FHA loan?
You don’t need perfect credit for an FHA loan. You may be eligible with a credit score as low as 500 to 580. If your credit score is below 580, you may need to make a larger down payment.
Will I have to pay mortgage insurance?
Yes. FHA loans require mortgage insurance to protect the lender.
How do FHA loans make homeownership more attainable?
FHA loans help more borrowers become homeowners sooner because the low down payment and lenient credit requirements allow more people to qualify.
FHA loans also allow cosigners or borrowers who don’t live in the home, higher debt-to-income ratios and gift money for down payments.
What can I use an FHA loan for?
You can use an FHA loan for a variety of home financing needs.
An FHA loan can help you:
- Buy a new home.
- Refinance your current loan.
- Buy a home that needs renovations with a loan that includes funds for those projects.
- Buy a new home if the old home was lost in a government-declared disaster.
- Build and buy a home with a one-time-close construction loan.
- Buy a home and pay to install solar or wind energy systems.
- Refinance and install solar or wind energy systems to your current home.
If you’re interested in an FHA loan, we’d love to help you get started. Contact your local PRMI Loan Originator today.